Australia to restrict gas exports due to domestic shortage

Australia's government will restrict gas exports from next year in an effort to contain soaring energy prices in the domestic market, the prime minister said Tuesday.

Australia is about to overtake Qatar as the world's largest exporter of liquefied natural gas. But most Australians face escalating power bills because state governments have restricted further gas exploration and no new coal-fired power stations are being built to replace aging generators that will soon be decommissioned.

Prime Minister Malcolm Turnbull said the government would not tolerate customers in Japan paying less for Australian gas than some Australian businesses were charged.

"Our first duty is to protect our people, our businesses, our households," Turnbull told reporters. "You can't seriously suggest that we — a nation that is about to become the largest exporter of LNG in the world — would have a shortage of gas in its east coast domestic market. We clearly have to address that."

The government will introduce new regulations from July 1 that will require energy companies such as ExxonMobil, Shell, Santos and Origin to give Australian customers priority access to gas supply before it is exported.

After the Australian supply shortfall is calculated, new regulations to restrict gas exports will take effect on Jan. 1.

A political divide is widening in Australia over future energy security. The center-left Labor Party wants more reliance on clean and renewable sources such as wind and solar. Turnbull blames the Labor government of Victoria state for contributing to the looming shortage by banning gas exploration.

Turnbull's conservative Liberal Party-led government argues renewable energy is unreliable and traditional sources such as coal and gas are still needed to avoid disruptions of supply and demand in the national grid.